The Marine Insurance Act

The Marine Insurance Act, C.C.S.M. c. M40 bilingual version (HTML) Table of Contents Section 1 Definitions 2 "Marine insurance" defined 3 Mixed sea and land risks 4 Marine insurance coverage 5 Marine adventure and maritine perils 6 Wagering or gaming contracts void 7 Insurable interest 8 When interest must attach 9 Defeasible, contingent and buyer's interest 10 Partial interests insurable 11 Reinsurance by insurer 12 Bottomry 13 Masters and seamen's wages 14 Advance freight 15 Charges of insurance 16 Quantum of interest, mortgagee may insure for other 17 Assignment of interest 18 Measure of insurable value 19 Insurance of utmost good faith 20 Disclosure by assured 21 Disclosure by agent effecting insurance 22 Representations pending negotiation of contract 23 When contract deemed concluded 24 Contract to be embodied in policy 25 What policy must specify 26 Signature of insurer, two or more insurers 27 Voyage and time policies 28 Designation of subject matter and nature of interest 29 Valued policy 30 Unvalued policy 31 Floating policy 32 Premium to be arranged 33 Contingent additional premium 34 Double insurance 35 Nature of warranty 36 When breach of warranty excused, no defence where breach remedied 37 Express warranties 38 Warranty of neutrality 39 No implied warranty of nationality 40 Warranty of good safety 41 Warranty of seaworthiness of ship 42 No implied warranty goods seaworthy, implied ship fit to carry goods 43 Warranty of legality 44 Implied condition as to commencement of risk 45 Alteration of port of departure 46 Sailing for different destination 47 Change of voyage 48 Deviation 49 Several ports of discharge 50 Delay in voyage 51 Excuses for deviation or delay 52 When and how policy assignable 53 Assured who has no interest cannot assign 54 When premium payable 55 Policy effected through broker 56 Effect of receipt of premium on policy effected by broker 57 Included and excluded losses 58 Partial and total loss 59 Actual total loss 60 Missing ship 61 Effect of transshipment 62 Constructive total loss 63 Effect of constructive total loss 64 Notice of abandonment 65 Effect of abandonment 66 Particular average loss, particular charges 67 Salvage charges 68 General average loss or act 69 Extent of liability of insurer for loss 70 Total loss 71 Partial loss of ship 72 Partial loss of freight 73 Partial loss of goods 74 Apportionment of valuation 75 Generable average contributions and salvage charges 76 Liabilities to third parties 77 General provisions as to measure of indemnity 78 Particular average warranties 79 Successive loss 80 Suing and labouring clause, duty to minimize 81 Right of subrogation 82 Right of contribution where double insurance 83 Effect of underinsurance 84 Enforcement of return of premium 85 Return of premium by agreement 86 Return for failure of consideration 87 Mutual insurance 88 Ratification by assured 89 Implied obligations varied by agreement or usage 90 Reasonable fine, premium or diligence question of fact 91 Rules of common law saved HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows: Definitions 1 In this Act, "action" includes counter-claim and set-off; (« action ») "freight" includes the profit derivable by a ship-owner from the employment of his ship to carry his own goods or movables, as well as freight payable by a third party, but does not include passage-money; (« fret ») "movables" means any movable tangible property, other than the ship, and includes money, valuable securities, and other documents; (« meubles ») "policy" means a marine policy. (« police ») Marine insurance defined 2 A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure. Mixed sea and land risks 3 A contract of marine insurance may, by its express terms or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage. Marine insurance coverage 4 Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, shall apply thereto; but, except as by this section provided, nothing in this Act shall alter or affect any rule of law applicable to any contract of insurance other than a contract of marine insurance as by this Act defined. Marine adventure and maritime perils defined 5(1) Subject to the provisions of this Act, every lawful marine adventure may be the subject of a contract of marine insurance. Insurable property 5(2) In particular there is a marine adventure where, (a) any ship, goods, or other movables are exposed to maritime perils. Such property is in this Act referred to as "insurable property"; (b) the earning or acquisition of any freight, passage-money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils; (c) any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property by reason of maritime perils. Maritime perils 5(3) "Maritime perils" means the perils consequent on or incidental to the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind or which may be designated by the policy. Avoidance of wagering or gaming contracts 6(1) Every contract of marine insurance by way of gaming or wagering is void. Deemed gaming or wagering contract 6(2) A contract of marine insurance is deemed to be a gaming or wagering contract, (a) where the assured has not an insurable interest as defined by this Act, and the contract is entered into with no expectation of acquiring such an interest; or (b) where the policy is made "interest or no interest", or "without further proof of interest than the policy itself", or "without benefit of salvage to the insurer", or subject to any other like term; but where there is no possibility of salvage a policy may be affected without benefit of salvage to the insurer. Insurable interest 7(1) Subject to the provisions of this Act, every person has an insurable interest who is interested in a marine adventure. Insurable interest 7(2) In particular a person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence of which he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss or by damage thereto or by the detention thereof, or may incur liability in respect thereof. When interest must attach 8(1) The assured must be interested in the subject-matter insured at the time of the loss though he need not be interested when the insurance is effected: Provided that where the subject-matter is insured "lost or not lost", the assured may recover although he may not have acquired his interest until after the loss, unless at the time of effecting the contract of insurance the assured was aware of the loss and the insurer was not. When interest cannot attach 8(2) Where the assured has no interest at the time of the loss, he cannot acquire interest by any act or election after he is aware of the loss. Defeasible or contingent interest 9(1) A defeasible interest is insurable, as also is a contingent interest. Buyer's interest 9(2) In particular, where the buyer of goods has insured them, he has an insurable interest, notwithstanding that he might, at his election, have rejected the goods, or have treated them as at the seller's risk, by reason of the latter's delay in making delivery or otherwise. Partial interest 10 A partial interest of any nature is insurable. Reinsurance 11(1) The insurer under a contract of marine insurance has an insurable interest in his risk and may reinsure in respect of it. Original assured's rights 11(2) Unless the policy otherwise provides, the original assured has no right or interest in respect of such reinsurance. Bottomry 12 The lender of money on bottomry or respondentia has an insurable interest in respect of the loan. Masters and seamen's wages 13 The master or any member of the crew of a ship has an insurable interest in respect of his wages. Advance freight 14 In the case of advance freight, the person advancing the freight has an insurable interest, in so far as such freight is not repayable in case of loss. Charges of insurance 15 The assured has an insurable interest in the charges of any insurance which he may effect. Quantum of interest 16(1) Where the subject-matter insured is mortgaged, the mortgagor has an insurable interest in the full value thereof, and the mortgagee has an insurable interest in respect of any sum due or to become due under the mortgage. Mortgagee may insure for other 16(2) A mortgagee, consignee, or other person having an interest in the subject-matter insured may insure on behalf and for the benefit of other persons interested as well as for his own benefit. Owner has full interest 16(3) The owner of insurable property has an insurable interest in respect of the full value thereof, notwithstanding that some third person may have agreed, or be liable, to indemnify him in case of loss. Assignment of interest 17 Where the assured assigns or otherwise parts with his interest in the subject-matter insured, he does not thereby transfer to the assignee his rights under the contract of insurance, unless there be an express or implied agreement with the assignee to that effect; but the provisions of this section do not affect a transmission of interest by operation of law. Measure of insurable value 18 Subject to any express provision or valuation in the policy, the insurable value of the subject-matter insured must be ascertained as follows: (a) In insurance on ship, the insurable value is the value, at the commencement of this risk, of the ship, including her outfit, provisions and stores for the officers and crew, money advanced for seamen's wages, and other disbursements (if any) incurred to make the ship fit for the voyage or adventure contemplated by the policy, plus the charges of insurance upon the whole. The insurable value, in the case of a steamship, includes also the machinery, boilers, and coals, oils, and engine stores if owned by the assured, and, in the case of a ship engaged in a special trade, the ordinary fittings requisite for that trade. (b) In insurance on freight, whether paid in advance or otherwise, the insurable value is the gross amount of the freight at the risk of the assured, plus the charges of insurance. (c) In insurance on goods or merchandise, the insurable value is the prime cost of the property insured, plus the expenses of and incidental to shipping and the charges of insurance upon the whole. (d) In insurance on any other subject-matter, the insurable value is the amount at the risk of the assured when the policy attaches, plus the charges of insurance. Insurance is of the utmost good faith 19 A contract of marine insurance is a contract based upon the utmost good faith, and if the utmost good faith be not observed by either party the contract may be avoided by the other party. Disclosure by assured 20(1) Subject to the provisions of this section, the assured must disclose to the insurer before the contract is concluded every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which in the ordinary course of business ought to be known by him. If the assured fails to make such disclosure the insurer may avoid the contract. Material circumstance 20(2) Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk. Circumstances not disclosed 20(3) In the absence of inquiry the following circumstances need not be disclosed, namely: (a) Any circumstance which diminishes the risk. (b) Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge and matters which an insurer in the ordinary course of his business, as such, ought to know. (c) Any circumstance as to which information is waived by the insurer. (d) Any circumstance which it is superfluous to disclose by reason of any express or implied warranty. Whether circumstances not disclosed material 20(4) Whether any particular circumstance which is not disclosed be material or not is in each case a question of fact. Circumstance 20(5) The term "circumstance" includes any communication made to or information received by the assured. Disclosure by agent effecting insurance 21 Subject to the provisions of the preceding section as to circumstances which need not be disclosed, where an insurance is effected for the assured by an agent, the agent must disclose to the insurer (a) every material circumstance which is known to himself, and an agent to insure is deemed to know every circumstance which in the ordinary course of business ought to be known by or to have been communicated to him; and (b) every material circumstance which the assured is bound to disclose, unless it come to his knowledge too late to communicate it to the agent. Representations pending negotiation of contract 22(1) Every material representation made by the assured or his agent to the insurer during the negotiations for the contract, and before the contract is concluded, must be true and if it be untrue, the insurer may avoid the contract. Material representation 22(2) A representation is material which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk. Representation may be as to fact or belief 22(3) A representation may be either a representation as to a matter of fact or as to a matter of expectation or belief. Where differences not material 22(4) A representation as to a matter of fact is true if it be substantially correct, that is to say, if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer. When representation is true 22(5) A representation as to a matter of expectation or belief is true if it be made in good faith. Correction of representation 22(6) A representation may be withdrawn or corrected before the contract is concluded. When representation is material 22(7) Whether a particular representation be material or not is in each case a question of fact. When contract is deemed to be concluded 23 A contract of marine insurance is deemed to be concluded when the proposal of the assured is accepted by the insurer, whether the policy be then issued or not; and for the purpose of showing when the proposal was accepted, reference may be made to the slip or covering note or other customary memorandum of the contract. Contract must be embodied in policy 24 A contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded or afterwards. What policy must specify 25 A marine policy must specify (a) the name of the assured or of some person who effects the insurance on his behalf; (b) the subject-matter insured and the risk insured against; (c) the voyage or period of time, or both, as the case may be, covered by the insurance; (d) the sum or sums insured; (e) the name or names of the insurers. Signature of insurer 26(1) A marine policy must be signed by or on behalf of the insurer, provided that in the case of a corporation the corporate seal may be sufficient, but nothing in this section shall be construed as requiring the subscription of a corporation to be under seal. Contract 26(2) Where a policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary be expressed, constitutes a distinct contract with the assured. Voyage and time policies 27 Where the contract is to insure the subject-matter "at and from", from one place to another or others, the policy is called a "voyage policy", and where the contract is to insure the subject-matter for a definite period of time the policy is called a "time policy". A contract for both voyage and time may be included in the same policy. Designation of subject-matter 28(1) The subject-matter insured must be designated in a marine policy with reasonable certainty. Nature of assured's interest need not be specified 28(2) The nature and extent of the interest of the assured in the subject-matter insured need not be specified in the policy. Construction where designation in general terms 28(3) Where the policy designates the subject-matter insured in general terms, it shall be construed to apply to the interest intended by the assured to be covered. Application of usage 28(4) In the application of this section, regard shall be had to any usage regulating the designation of the subject-matter insured. Valued policy 29(1) A policy may be either valued or unvalued. When a valued policy 29(2) A valued policy is a policy which specifies the agreed value of the subject-matter insured. Value conclusive 29(3) Subject to the provisions of this Act, and in the absence of fraud, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss be total or partial. Value not conclusive for determining constructive loss 29(4) Unless the policy otherwise provides, the value fixed by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss. Unvalued policy 30 An unvalued policy is a policy which does not specify the value of the subject-matter insured, but, subject to the limit of the sum insured, leaves the insurable value to be subsequently ascertained in the manner hereinbefore specified. Floating policy 31(1) A floating policy is a policy which describes the insurance in general terms and leaves the name of the ship or ships and other particulars to be defined by subsequent declaration. Subsequent declarations 31(2) The subsequent declaration or declarations may be made by endorsement on the policy or in other customary manner. Requirements of declarations 31(3) Unless the policy otherwise provides, the declarations must be made in the order of dispatch or shipment. They must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith. Declaration after notice 31(4) Unless the policy otherwise provides, where a declaration of value is not made until after notice of loss or arrival, the policy must be treated as an unvalued policy as regards the subject-matter of that declaration. Premium to be arranged 32 Where an insurance is effected at a premium to be arranged, and no arrangement is made, a reasonable premium is payable. Contingent additional premium 33 Where an insurance is effected on the terms that an additional premium is to be arranged in a given event, and that event happens but no arrangement is made, then a reasonable additional premium is payable. Double insurance 34(1) Where two or more policies are effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by this Act, the assured is said to be overinsured by double insurance. Overinsurance 34(2) Where the assured is overinsured by double insurance, (a) the assured, unless the policy otherwise provides, may claim payment from the insurers in such order as he may think fit, provided that he is not entitled to receive any sum in excess of the indemnity allowed by this Act; (b) where the policy under which the assured claims is a valued policy, the assured must give credit as against the valuation for any sum received by him under any other policy without regard to the actual value of the subject-matter insured; (c) where the policy under which the assured claims is an unvalued policy, he must give credit, as against the full insurable value, for any sum received by him under any other policy; (d) where the assured receives any sum in excess of the indemnity allowed by this Act, he is deemed to hold such sum in trust for the insurers, according to their right of contribution among themselves. Nature of warranty 35(1) A warranty , in the following sections relating to warranties, means a promissory warranty, that is to say, a warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts. Express or implied 35(2) A warranty may be express or implied. Strict compliance 35(3) A warranty, as above defined, is a condition which must be exactly complied with, whether it be material to the risk or not. If it be not so complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date. When breach of warranty excused 36(1) Non-compliance with a warranty is excused when, by reason of a change of circumstances, the warranty ceases to be applicable to the circumstances of the contract, or when compliance with the warranty is rendered unlawful by any subsequent law. No defence 36(2) Where a warranty is broken, the assured cannot avail himself of the defence that the breach has been remedied and the warranty complied with before loss. Waiver 36(3) A breach of warranty may be waived by the insurer. Express warranties 37(1) An express warranty may be in any form of words from which the intention to warrant is to be inferred. Document 37(2) An express warranty must be included in or written upon the policy, or must be contained in some document incorporated by reference into the policy. Not including implied warranty 37(3) An express warranty does not exclude an implied warranty, unless it be inconsistent therewith. Warranty of neutrality 38(1) Where insurable property, whether ship or goods, is expressly warranted "neutral", there is an implied condition that the property shall have a neutral character at the commencement of the risk, and that, so far as the assured can control the matter, its neutral character shall be preserved during the risk. Properly documented 38(2) Where a ship is expressly warranted "neutral", there is also an implied condition that, so far as the assured can control the matter, she shall be properly documented, that is to say, that she shall carry the necessary papers to establish her neutrality, and that she shall not falsify or suppress her papers or use simulated papers. If any loss occurs through breach of this condition, the insurer may avoid the contract. No implied warranty of nationality 39 There is no implied warranty as to the nationality of a ship, or that her nationality shall not be changed during the risk. Warranty of good safety 40 Where the subject-matter insured is warranted "well" or "in good safety" on a particular day, it is sufficient if it be safe at any time during that day. Warranty of seaworthiness of ship 41(1) In a voyage policy there is an implied warranty that at the commencement of the voyage the ship shall be seaworthy for the purpose of the particular adventure insured. Reasonably fit 41(2) Where the policy attaches while the ship is in port, there is also an implied warranty that she shall at the commencement of the risk be reasonably fit to encounter the ordinary perils of the port. At different stages 41(3) Where the policy relates to a voyage which is performed in different stages, during which the ship requires different kinds of or further preparation or equipment, there is an implied warranty that at the commencement of each stage the ship is seaworthy in respect of such preparation or equipment for the purposes of that stage. Seaworthy-meaning 41(4) A ship is deemed to be seaworthy when she is reasonably fit in all respects to encounter the ordinary perils of the seas of the adventure insured. Timed policy 41(5) In a time policy there is no implied warranty that the ship shall be seaworthy at any stage of the adventure, but where, with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness. No implied warranty that goods are seaworthy 42(1) In a policy on goods or other movables there is no implied warranty that the goods or movables are seaworthy. Fit to carry goods 42(2) In a voyage policy on goods or other movables there is an implied warranty that at the commencement of the voyage the ship is not only seaworthy as a ship, but also that she is reasonably fit to carry the goods or other movables to the destination contemplated by the policy. Warranty of legality 43 There is an implied warranty that the adventure insured is a lawful one, and that, so far as the assured can control the matter, the adventure shall be carried out in a lawful manner. Implied condition as to commencement of risk 44(1) Where the subject-matter is insured by a voyage policy "at and from" or "from" a particular place, it is not necessary that the ship should be at that place when the contract is concluded, but there is an implied condition that the adventure shall be commenced within a reasonable time, and that if the adventure be not so commenced the insurer may avoid the contract. Negative 44(2) The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before the contract was concluded, or by showing that he waived the condition. Alteration of port of departure 45 Where the place of departure is specified by the policy, and the ship, instead of sailing from that place, sails from any other place, the risk does not attach. Sailing for different destination 46 Where the destination is specified in the policy, and the ship, instead of sailing for that destination, sails for any other destination, the risk does not attach. Change of voyage 47(1) Where, after the commencement of the risk, the destination of the ship is voluntarily changed from the destination contemplated by the policy, there is said to be a change of voyage. Effect 47(2) Unless the policy otherwise provides, where there is a change of voyage, the insurer is discharged from liability as from the time of change, that is to say, as from the time when the determination to change it is manifested; and it is immaterial that the ship may not in fact have left the course of voyage contemplated by the policy when the loss occurs. Deviation 48(1) Where a ship, without lawful excuse, deviates from the voyage contemplated by the policy, the insurer is discharged from liability as from the time of deviation, and it is immaterial that the ship may have regained her route before any loss occurs. Meaning 48(2) There is a deviation from the voyage contemplated by the policy (a) where the course of the voyage is specifically designated by the policy and that course is departed from; or (b) where the course of the voyage is not specifically designated by the policy, but the usual and customary course is departed from. Intention 48(3) The intention to deviate is immaterial; there must be a deviation in fact to discharge the insurer from his liability under the contract. Several ports of discharge 49(1) Where several ports of discharge are specified by the policy, the ship may proceed to all or any of them, but, in the absence of any usage or sufficient cause to the contrary, she must proceed to them, or such of them as she goes to, in the order designated by the policy. If she does not there is a deviation. Geographical order 49(2) Where the policy is to "ports of discharge", within a given area, which are not named, the ship must, in the absence of any usage or sufficient cause to the contrary, proceed to them, or such of them as she goes to, in their geographical order. If she does not there is a deviation. Delay in voyage 50 In the case of a voyage policy, the adventure insured must be prosecuted throughout its course with reasonable dispatch, and, if without lawful excuse it is not so prosecuted, the insurer is discharged from liability as from the time when the delay became unreasonable. Excuses for deviation or delay 51(1) Deviation or delay in prosecuting the voyage contemplated by the policy is excused (a) where authorized by any special term in the policy; or (b) where caused by circumstances beyond the control of the master and his employer; or (c) where reasonably necessary in order to comply with an express or implied warranty; or (d) where reasonably necessary for the safety of the ship or subject-matter insured; or (e) for the purpose of saving human life, or aiding a ship in distress where human life may be in danger; or (f) where reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship; or (g) where caused by the barratrous conduct of the master or crew, if barratry be one of the perils insured against. Cause ceases 51(2) When the cause excusing the deviation or delay ceases to operate, the ship must resume her course and prosecute her voyage with reasonable dispatch. When and how policy is assignable 52(1) A marine policy is assignable unless it contains terms expressly prohibiting assignment. It may be assigned either before or after loss. Assignee may sue 52(2) Where a marine policy has been assigned so as to pass the beneficial interest in such policy, the assignee of the policy is entitled to sue thereon in his own name; and the defendant is entitled to make any defence arising out of the contract which he would have been entitled to make if the action had been brought in the name of the person by or on behalf of whom the policy was effected. Method of endorsement 52(3) A marine policy may be assigned by endorsement thereon or in other customary manner. Assured who has no interest cannot assign 53 Where the assured has parted with or lost his interest in the subject-matter insured, and has not, before or at the time of so doing, expressly or impliedly agreed to assign the policy, any subsequent assignment of the policy is inoperative: Provided that nothing in this section affects the assignment of a policy after loss. When premium payable 54 Unless otherwise agreed, the duty of the assured or his agent to pay the premium, and the duty of the insurer to issue the policy to the assured or his agent, are concurrent conditions, and the insurer is not bound to issue the policy until payment or tender of the premium. Policy effected through broker 55(1) Unless otherwise agreed, where a marine policy is effected on behalf of the assured by a broker, the broker is directly responsible to the insurer for the premium, and the insurer is directly responsible to the assured for the amount which may be payable in respect of losses or in respect of returnable premium. Broker's lien 55(2) Unless otherwise agreed, the broker has, as against the assured, a lien upon the policy for the amount of the premium and his charges in respect of effecting the policy; and, where he has dealt with the person who employs him as a principal, he had also a lien on the policy in respect of any balance on any insurance account which may be due to him from such person, unless when the debt was incurred he had reason to believe that such person was only an agent. Effect of receipt on policy 56 Where a marine policy effected on behalf of the assured by a broker acknowledges the receipt of the premium, such acknowledgment is, in the absence of fraud, conclusive as between the insurer and the assured, but not as between the insurer and broker. Included and excluded losses 57(1) Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not proximately caused by a peril insured against. Particular cases 57(2) In particular (a) the insurer is not liable for any loss attributable to the wilful misconduct of the assured, but, unless the policy otherwise provides, he is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew; (b) unless the policy otherwise provides, the insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay is caused by a peril insured against; (c) unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject-matter insured, or for any loss proximately caused by rats or vermin, or for any injury to machinery not proximately caused by maritime perils. Partial and total loss 58(1) A loss may be either total or partial. Any loss other than a total loss, as hereinafter defined, is a partial loss. Actual or constructive 58(2) A total loss may be either an actual total loss or constructive total loss. Interpretation 58(3) Unless a different intention appears from the terms of the policy, an insurance against total loss includes a constructive as well as an actual total loss. When only partial loss 58(4) Where the assured brings an action for a total loss and the evidence proves only a partial loss, he may, unless the policy otherwise provides, recover for a partial loss. Specie 58(5) Where goods reach their destination in specie, but by reason of obliteration of marks, or otherwise, they are incapable of identification, the loss (if any) is partial and not total. Actual total loss 59(1) Where the subject-matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof, there is an actual total loss. Notice need not be given 59(2) In the case of an actual total loss no notice of abandonment need be given. Missing ship 60 Where the ship concerned in the adventure is missing, and after the lapse of a reasonable time no news of her has been received, an actual total loss may be presumed. Effect of transhipment, etc. 61 Where, by a peril insured against, the voyage is interrupted at an intermediate port or place under such circumstances as, apart from any special stipulation in the contract of affreightment, to justify the master in landing and reshipping the goods or other movables, or in transhipping them, and sending them on to their destination, the liability of the insurer continues, notwithstanding the landing or transhipment. Constructive total loss defined 62(1) Subject to any express provision in the policy, there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred. Particular case 62(2) In particular, there is a constructive total loss (a) where the assured is deprived of the possession of his ship or goods by a peril insured against, and (i) it is unlikely that he can recover the ship or goods, as the case may be; or (ii) the cost of recovering the ship or goods, as the case may be, would exceed their value when recovered; or (b) in the case of damage to a ship, where she is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired. In estimating the cost of repairs, no deduction is to be made in respect of general average contributions to those repairs payable by other interests, but account is to be taken of the expense of future salvage operations and of any future general average contributions to which the ship would be liable if repaired; or (c) in the case of damage to goods, where the cost of repairing the damage and forwarding the goods to their destination would exceed their value on arrival. Effect of constructive total loss 63 Where there is a constructive total loss, the assured may either treat the loss as a partial loss or abandon the subject-matter insured to the insurer and treat the loss as if it were an actual total loss. Notice of abandonment 64(1) Subject to the provisions of this section, where the assured elects to abandon the subject-matter insured to the insurer, he must give notice of abandonment. If he fails to do so the loss can only be treated as a partial loss. Method of giving 64(2) Notice of abandonment may be given in writing or by word of mouth, or partly in writing and partly by word of mouth, and may be given in any terms which indicate the intention of the assured to abandon his insured interest in the subject-matter insured unconditionally to the insurer. Reasonable diligence 64(3) Notice of abandonment must be given with reasonable diligence after the receipt of reliable information of the loss, but where the information is of a doubtful character the assured is entitled to a reasonable time to make inquiry. Where insurer refuses to accept 64(4) Where notice of abandonment is properly given, the rights of the assured are not prejudiced by the fact that the insurer refuses to accept the abandonment. Express or implied 64(5) The acceptance of an abandonment may be either express or implied from the conduct of the insurer. The mere silence of the insurer after notice is not an acceptance. Acceptance 64(6) Where notice of abandonment is accepted the abandonment is irrevocable. The acceptance of the notice conclusively admits liability for the loss and the sufficiency of the notice. Where unnecessary 64(7) Notice of abandonment is unnecessary where, at the time when the assured receives information of the loss, there would be no possibility of benefit to the insurer if notice were given to him. Waiver 64(8) Notice of abandonment may be waived by the insurer. Reinsurance 64(9) Where an insurer has reinsured his risk, no notice of abandonment need be given by him. Effect of abandonment 65(1) Where there is a valid abandonment, the insurer is entitled to take over the interest of the assured in whatever may remain of the subject-matter insured and all proprietary rights incidental thereto. Insurer entitled to freight 65(2) Upon the abandonment of a ship, the insurer thereof is entitled to any freight in course of being earned, and which is earned by her subsequent to the casualty causing the loss, less the expenses of earning it incurred after the casualty; and, where the ship is carrying the owner's goods, the insurer is entitled to a reasonable remuneration for the carriage of them subsequent to the casualty causing the loss. Particular average loss 66(1) A particular average loss is a partial loss of the subject-matter insured, caused by a peril insured against, and which is not a general average loss. Expenses 66(2) Expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured, other than general average and salvage charges, are called particular charges. Particular charges are not included in particular average. Salvage charges 67(1) Subject to any express provision in the policy, salvage charges incurred in preventing a loss by perils insured against may be recovered as a loss by those perils. Meaning 67(2) "Salvage charges" means the charges recoverable under maritime law by a salvor independently of contract. They do not include the expenses of services in the nature of salvage rendered by the assured or his agents, or any person employed for hire by them, for the purpose of averting a peril insured against. Such expenses, where properly incurred, may be recovered as particular charges or as a general average loss, according to the circumstances under which they were incurred. General average loss 68(1) A general average loss is a loss caused by or directly consequential on a general average act. It includes a general average expenditure as well as a general average sacrifice. General average act 68(2) There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure. Contribution 68(3) Where there is a general average loss, the party on whom it falls is entitled, subject to the conditions imposed by maritime law, to a rateable contribution from the other parties interested, and such contribution is called a general average contribution. Insured may recover 68(4) Subject to any express provision in the policy, where the assured has incurred a general average expenditure, he may recover from the insurer in respect of the proportion of the loss which falls upon him; and, in the case of a general average sacrifice, he may recover from the insurer in respect of the whole loss without having enforced his right of contribution from the other parties liable to contribute. Insurer liable to pay 68(5) Subject to any express provision in the policy, where the assured has paid, or is liable to pay, a general average contribution in respect of the subject insured, he may recover therefor from the insurer. Non-liability 68(6) In the absence of express stipulation, the insurer is not liable for any general average loss or contribution where the loss was not incurred for the purpose of avoiding, or in connection with the avoidance of, a peril insured against. Owner of ship, freight and cargo 68(7) Where ship, freight, and cargo, or any two of those interests, are owned by the same assured, the liability of the insurer in respect of general average losses or contributions is to be determined as if those subjects were owned by different persons. Extent of liability of insurer for loss 69(1) The sum which the assured can recover in respect of a loss on a policy by which he is insured, in the case of an unvalued policy to the full extent of the insurable value, or in the case of a valued policy to the full extent of the value fixed by the policy, is called the measure of indemnity. Proportion 69(2) Where there is a loss recoverable under the policy, the insurer, or each insurer if there be more than one, is liable for such proportion of the measure of indemnity as the amount of his subscription bears to the value fixed by the policy in the case of a valued policy, or to the insurable value in the case of an unvalued policy. Total loss 70 Subject to the provisions of this Act and to any express provision in the policy, where there is a total loss of the subject-matter insured, (a) if the policy be a valued policy, the measure of indemnity is the sum fixed by the policy; (b) if the policy be an unvalued policy, the measure of indemnity is the insurable value of the subject-matter insured. Partial loss of ship 71 Where a ship is damaged, but is not totally lost, the measure of indemnity, subject to any express provision in the policy, is as follows: (a) Where the ship has been repaired, the assured is entitled to the reasonable cost of the repairs, less the customary deductions, but not exceeding the sum insured in respect of any one casualty. (b) Where the ship has been only partially repaired, the assured is entitled to the reasonable cost of such repairs, computed as above, and also to be indemnified for the reasonable depreciation, if any, arising from the unrepaired damage, provided that the aggregate amount shall not exceed the cost of repairing the whole damage, computed as above. (c) Where the ship has not been repaired and has not been sold in her damaged state during the risk, the assured is entitled to be indemnified for the reasonable depreciation arising from the unrepaired damage, but not exceeding the reasonable cost of repairing such damage, computed as above. Partial loss of freight 72 Subject to any express provision in the policy, where there is a partial loss of freight, the measure of indemnity is such proportion of the sum fixed by the policy in the case of a valued policy, or of the insurable value in the case of an unvalued policy, as the proportion of freight lost by the assured bears to the whole freight at the risk of the assured under the policy. Partial loss of goods, merchandise, etc. 73 Where there is a partial loss of goods, merchandise, or other movables, the measure of indemnity, subject to any express provision in the policy, is as follows: (a) where part of the goods, merchandise, or other movables insured by a valued policy is totally lost, the measure of indemnity is such proportion of the sum fixed by the policy as the insurable value of the part lost bears to the insurable value of the whole, ascertained as in the case of an unvalued policy. (b) where part of the goods, merchandise, or other movables insured by an unvalued policy is totally lost, the measure of indemnity is the insurable value of the part lost, ascertained as in the case of total loss. (c) where the whole or any part of the goods or merchandise insured has been delivered damaged at its destination, the measure of indemnity is such proportion of the sum fixed by the policy in the case of a valued policy, or of the insurable value in the case of an unvalued policy, as the difference between the gross sound and damaged values at the place of arrival bears to the gross sound value. (d) "gross value" means the wholesale price or, if there be no such price, the estimated value, with, in either case, freight, landing charges, and duty paid beforehand; provided that, in the case of goods or merchandise customarily sold in bond, the bonded price is deemed to be the gross value. "Gross proceeds" means the actual price obtained at a sale where all charges on sale are paid by the sellers. Apportionment of valuation 74(1) Where different species of property are insured under a single valuation, the valuation must be apportioned over the different species in proportion to their respective insurable values, as in the case of an unvalued policy. The insured value of any part of a species is such proportion of the total insured value of the same as the insurable value of the part bears to the insurable value of the whole, ascertained in both cases as provided by this Act. Where prime cost cannot be ascertained 74(2) Where a valuation has to be apportioned and particulars of the prime cost of each separate species, quality, or description of goods cannot be ascertained, the division of the valuation may be made over the net arrived sound values of the different species, qualities, or descriptions of goods. General average contributions and salvage charges 75(1) Subject to any express provision in the policy, where the assured has paid, or is liable for, any general average contribution, the measure of indemnity is the full amount of such contribution, if the subject-matter liable to contribution is insured for its full contributory value;

but, if such subject-matter be not insured for its full contributory value, or if only part of it be insured, the indemnity payable by the insurer must be reduced in proportion to the underinsurance, and where there has been a particular average loss which constitutes a deduction from the contributory value, and for which the insurer is liable, that amount must be deducted from the insured value in order to ascertain what the insurer is liable to contribute. Where insurer liable for salvage charges 75(2) Where the insurer is liable for salvage charges the extent of his liability must be determined on the like principle. Liabilities to third parties 76 Where the assured has effected an insurance in express terms against any liability to a third party, the measure of indemnity, subject to any express provision in the policy, is the amount paid or payable by him to such third party in respect of such liability. General provisions as to measure of indemnity 77(1) Where there has been a loss in respect of any subject-matter not expressly provided for in the foregoing provisions of this Act, the measure of indemnity shall be ascertained, as nearly as may be, in accordance with those provisions, in so far as applicable to the particular case. Rules re double insurance 77(2) Nothing in the provisions of this Act relating to the measure of indemnity shall affect the rules relating to double insurance, or prohibit the insurer from disproving interest wholly or in part, or from showing that at the time of the loss the whole or any part of the subject-matter insured was not at risk under the policy. Particular average warranties 78(1) Where the subject-matter insured is warranted free from particular average, the assured cannot recover for a loss of part, other than a loss incurred by a general average sacrifice, unless the contract contained in the policy be apportionable; but, if the contract be apportionable, the assured may recover for a total loss of any apportionable part. Salvage charges 78(2) Where the subject-matter insured is warranted free from particular average, either wholly or under a certain percentage, the insurer is nevertheless liable for salvage charges, and for particular charges and other expenses properly incurred pursuant to the provisions of the suing and labouring clause in order to avert a loss insured against. No adding losses 78(3) Unless the policy otherwise provides, where the subject-matter insured is warranted free from particular average under a specified percentage, a general average loss cannot be added to a particular average loss to make up the specified percentage. Method of determining 78(4) For the purpose of ascertaining whether the specified percentage has been reached, regard shall be had only to the actual loss suffered by the subject-matter insured. Particular charges and the expenses of and incidental to ascertaining and proving the loss must be excluded. Successive losses 79(1) Unless the policy otherwise provides and subject to the provisions of this Act, the insurer is liable for successive losses, even though the total amount of such losses may exceed the sum insured. Partial and total loss 79(2) Where, under the same policy, a partial loss which has not been repaired or otherwise made good is followed by a total loss, the assured can only recover in respect of the total loss, but nothing in this section shall affect the liability of the insurer under the suing and labouring clause. Suing and labouring clause 80(1) Where the policy contains a suing and labouring clause, the engagement thereby entered into is deemed to be supplementary to the contract of insurance, and the assured may recover from the insurer any expenses properly incurred pursuant to the clause, notwithstanding that the insurer may have paid for a total loss, or that the subject-matter may have been warranted free from particular average, either wholly or under a certain percentage. Non-recovery 80(2) General average losses and contributions and salvage charges as defined by this Act are not recoverable under the suing and labouring clause. Expenses to avert loss 80(3) Expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under the suing and labouring clause. Duty to minimize 80(4) It is the duty of the assured and his agents in all cases to take such measures as may be reasonable for the purpose of averting or minimizing a loss. Right of subrogation 81(1) Where the insurer pays for a total loss, either of the whole or, in the case of goods, of any apportionable part of the subject-matter insured, he thereupon becomes entitled subject-matter over the interest of the assured in whatever may remain of the subject-matter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss. No title 81(2) Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by such payment for the loss. Right of contribution 82(1) Where the assured is overinsured by double insurance, each insurer is bound, as between himself and the other insurers, to contribute rateably to the loss in proportion to the amount for which he is liable under his contract. Insurer who pays more 82(2) If any insurer pays more than his proportion of the loss, he is entitled to maintain an action for contribution against the other insurers, and is entitled to the like remedies as a surety who has paid more than his proportion of the debt. Effect of underinsurance 83 Where the assured is insured for an amount less than the insurable value or, in the case of a valued policy, for an amount less than the policy valuation, he is deemed to be his own insurer in respect of the uninsured balance. Enforcement of return 84 Where the premium, or a proportionate part thereof, is by this Act declared to be returnable, (a) if already paid, it may be recovered by the assured from the insurer; and (b) if unpaid, it may be retained by the assured or his agent. Return by agreement 85 Where the policy contains a stipulation for the return of the premium, or a proportionate part thereof, on the happening of a certain event, and that event happens, the premium, or, as the case may be, the proportionate part thereof, is thereupon returnable to the assured. Return for failure of consideration 86(1) Where the consideration for the payment of the premium totally fails, and there has been no fraud or illegality on the part of the assured or his agents, the premium is thereupon returnable to the assured. Premium apportionable 86(2) Where the consideration for the payment of the premium is apportionable and there is a total failure of any apportionable part of the consideration, a proportionate part of the premium is, under the like conditions, thereupon returnable to the assured. Particular case 86(3) In particular (a) where the policy is void, or is avoided by the insurer as from the commencement of the risk, the premium is returnable, provided that there has been no fraud or illegality on the part of the assured; but if the risk is not apportionable, and has once attached, the premium is not returnable; (b) where the subject-matter insured, or part thereof, has never been imperilled, the premium, or, as the case may be, a proportionate part thereof, is returnable: Provided that where the subject-matter has been insured "lost or not lost" and has arrived in safety at the time when the contract is concluded, the premium is not returnable unless at such time the insurer knew of the safe arrival; (c) where the assured has no insurable interest throughout the currency of the risk, the premium is returnable, provided that this rule does not apply to a policy effected by way of gaming or wagering; (d) where the assured has a defeasible interest which is determinated during the currency of the risk, the premium is not returnable; (e) where the assured has overinsured under an unvalued policy, a proportionate part of the premium is returnable; (f) subject to the foregoing provisions, where the assured has overinsured by double insurance, a proportionate part of the several premiums is returnable: Provided that, if the policies are effected at different times, and any earlier policy has at any time borne the entire risk, or if a claim has been paid on the policy in respect of the full sum insured thereby, no premium is returnable in respect of that policy, and when the double insurance is effected knowingly by the assured no premium is returnable. Mutual insurance 87(1) Where two or more persons mutually agree to insure each other against marine losses there is said to be a mutual insurance. Premium 87(2) The provisions of this Act relating to the premium do not apply to mutual insurance, but a guarantee, or such other arrangement as may be agreed upon, may be substituted for the premium. Modification 87(3) The provisions of this Act, in so far as they may be modified by the agreement of the parties, may in the case of mutual insurance be modified by the terms of the policies issued by the association or by the rules and regulations of the association. Act applies 87(4) Subject to the exceptions mentioned in this section, the provisions of this Act apply to a mutual insurance. Ratification by assured 88 Where a contract of marine insurance is in good faith effected by one person on behalf of another, the person on whose behalf it is effected may ratify the contract even after he is aware of a loss. Implied obligations varied by agreement or usage 89(1) Where any right, duty, or liability would arise under a contract of marine insurance by implication of law, it may be negatived or varied by express agreement, or by usage, if the usage be such as to bind both parties to the contract. All rights, duties 89(2) The provisions of this section extend to any right, duty, or liability declared by this Act which may be lawfully modified by agreement. Reasonable time, etc., a question of fact 90 Where by this Act any reference is made to reasonable time, reasonable premium, or reasonable diligence, the question what is reasonable is a question of fact. Rules of common law saved 91 The rules of the common law, including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to contracts of marine insurance.